Tuesday, January 29, 2013

U.S. Sens. Sherrod Brown (D-OH) and Chuck Grassley (R-IA) sent a letter today to U.S. Attorney General Eric Holder questioning whether the “too big to fail” status of certain Wall Street megabanks undermines the ability of the federal government to prosecute wrongdoing and impose appropriate penalties. They also requested that the Justice Department disclose the identities of parties with whom prosecutors consult about the appropriate level of penalties for financial institutions.

“Wall Street megabanks aren’t just too big to fail, they’re increasingly too big to jail,” Brown said. “Already, the nation’s six largest megabanks enjoy what amounts to taxpayer-funded guarantee by virtue of their size, making it harder for regional and community banks to compete. Now, these megabanks may also enjoy some impunity when they violate the law by laundering money or illegally foreclosing on homeowners. Wall Street should pay the full price of its wrongdoing, not pass the costs along to taxpayers.”

“The best deterrent to crime is to put people in prison,” Grassley said. “That includes those at powerful banks and corporations. Unfortunately, we’ve seen little willingness to charge these individuals criminally. The public deserves an explanation of how the Justice Department arrives at these decisions.”

I think we'd all like to know. The American people would like to know. The banking cartel has become immune from prosecution because they collude to threaten our economy with destruction if we so much as look at them askance.

But it's an empty threat. They're not a force of nature. They exist because of laws on the books. And while it might be a little messy, the various pensions, bonds and investments they hold on their books can be transferred to a variety of smaller, more manageable institutions.